Daryl Hagler and Kenneth Rozenberg, the co-owners of Centers Health Care, settled a lawsuit brought by New York Attorney General Letitia James.
The AG’s office announced the settlement on Thursday, which will require the operators of Centers to pay $45 million, a majority of which will go to improving resident care and staffing at a handful of nursing homes in the state. The deal also includes requirements to increase staffing, make reforms deemed necessary by an independent monitor and have a separate monitor oversee the nursing homes’ finances.
“Centers and its owners will pay for the harm they caused and will continue to make major reforms at their facilities to ensure residents receive the care they deserve,” James said in a press release.
Centers in a statement lauded the decision, which it said “dismisses all allegations of wrongdoing.”
“We are committed to fully implementing the settlement terms, including a significant investment in resident care,” the operators said in a statement.
James’ office filed its lawsuit last year, alleging the business partners converted more than $83 million in Medicaid and Medicare funds to enrich themselves while residents at four nursing homes faced disturbing conditions, leading to severe dehydration, malnutrition and increased risk of death.
The state also alleged that the nursing home owners entered into deals that saddled the homes with debt and forced inflated rents to be paid to Hagler’s companies. The nursing homes in question are located in Queens, the Bronx, White Plains and Buffalo.
James sought to prohibit the nursing homes from admitting new residents until staffing increases to appropriate standards.
Hagler is a real estate investor with a track record of deals in the outer boroughs. His notable acquisitions include a former Cigar Factory in Astoria and the Staybridge Suites hotel in Long Island City.
He’s also partnered with Brooklyn developer Isaac Hager on several deals.
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